AlistairBarr

Ace
ACE, +7.30%
one of the largest global property and casualty insurers, said the quarter's operating income, which excludes net realized gains and losses, came in at $441 million, or $1.49 a share, compared with $411 million or $1.40 a share a year ago.

Insurers often report operating income -- which differs from net income -- because they say it's a more accurate indication of the performance of their main underwriting businesses. Insurance analysts also frequently focus on operating income.

Ace was expected to earn $1.43 a share, according to the average estimate of 19 analysts compiled by Thomson First Call.

Net income was $433 million, or $1.46 a share, down from $447 million or $1.53 a share in the same period a year earlier, Ace said.

For its part, XL
XL, -2.99%
announced that first-quarter operating income was also a record at $346.5 million, or $2.49 a share, up from $332.5 million or $2.39 a share a year ago.

XL was expected to earn $2.36 a share in the period, according to the average estimate of 19 analysts in a Thomson First Call survey.

Underwriting profit

Ace sells property and casualty insurance and reinsurance in about 50 countries. It reported that the property and casualty combined ratio came in at 89.2 for the period.

The combined ratio -- claims and expenses as a percentage of premiums -- is a common measure of an insurer's underwriting profitability. A figure at or below 100 indicates an underwriting profit.

Paul Newsome, an analyst at A.G. Edwards, was expecting a combined ratio of 88.6.

XL said its combined ratio was 89.7 in the first quarter. Newsome had forecast a ratio of 89.2

Premium growth

Ace said net written premiums were $3.365 billion in the first quarter, up 4% from the same period a year earlier.

Newsome was forecasting $3.409 billion in net written premiums.

Competition between insurers looking to build market share has begun to dent some insurance prices. That can restrain premium growth.

Ace Chief Executive Evan Greenberg said written premium growth "is naturally slowing in line with a softening rate environment and our determination to maintain underwriting discipline."

XL said its net written premiums increased 2% to $2.8 billion in the first quarter.

Greenberg family

Evan Greenberg is the only member of an influential insurance industry family that is still running a major insurance company.

Jeffrey Greenberg, Evan's brother, was ousted as chief executive of Marsh & McLennan
MMC, +0.93%
last year after the top insurance broker was charged with bid rigging and steering by New York Attorney General Eliot Spitzer.

Their father, Maurice "Hank" Greenberg, stepped down as chief executive of American International Group
AIG, -0.89%
last month amid investigations by Spitzer and other regulators into the giant insurer's use of so-called finite reinsurance.

Ace itself has been touched by these scandals.

The company is one of many insurers that have been subpoenaed by Spitzer and the Securities and Exchange Commission as part of their investigations into finite reinsurance.

The company was also named in Spitzer's October bid-rigging lawsuit against Marsh. One Ace executive pleaded guilty to criminal charges last year stemming from the complaint.

Ace didn't comment on these issues in its earnings statement Tuesday. The company has said in the past that it is cooperating with inquiries.

Shares of Ace were up 13 cents after hours to $39.75 after closing down 17 cents at $39.62 in the regular session.

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